ISRAEL implemented a unilateral ceasefire early today in its 22-day offensive that turned Gaza neighbourhoods into battlegrounds and dealt a stinging blow to the Islamic militants of Hamas.

But Israeli troops will stay in the Palestinian territory for now and Hamas threatened to keep fighting until they leave.

In announcing the ceasefire late yesterday, Prime Minister Ehud Olmert said Israel had achieved its goals and more.

"Hamas was hit hard, in its military arms and in its government institutions. It's leaders are in hiding and many of its men have been killed," Mr Olmert said.

Israel launched the offensive on December 27 to stop years of rocket fire from Gaza at southern Israeli towns. But the rockets did not stop coming throughout the assault.

Militants fired about 30 rockets into Israel yesterday, eight of them around the time Mr Olmert spoke.

There was no rocket fire in the first four hours after the truce went into effect, the Israeli military said.

More than 1,100 Palestinians have been killed in the offensive, about half of them civilians, according to Palestinian and UN officials. At least 13 Israelis have also been killed.

According to Mr Olmert's statement, the ceasefire went into effect at 2am today local time.